Caveolin-3 is the principal structural protein of caveolae membrane domains in striated muscle cells. Caveolin-3 mRNA and protein expression are dramatically induced during the differentiation of C2C12 skeletal myoblasts, coincident with myoblast fusion. In these myotubes, caveolin-3 localizes to the sarcolemma (muscle cell plasma membrane), where it associates with the dystrophin-glycoprotein complex. However, it remains unknown what role caveolin-3 plays in myoblast differentiation and myotube formation. Here, we employ an antisense approach to derive stable C2C12 myoblasts that fail to express the caveolin-3 protein. We show that C2C12 cells harboring caveolin-3 antisense undergo differentiation and express normal amounts of four muscle-specific marker proteins. However, C2C12 cells harboring caveolin-3 antisense fail to undergo myoblast fusion and, therefore, do not form myotubes. Interestingly, treatment with specific p38 mitogen-activated protein kinase inhibitors blocks both myotube formation and caveolin-3 expression, but does not affect the expression of other muscle-specific proteins. In addition, we find that three human rhabdomyosarcoma cell lines do not express caveolin-3 and fail to undergo myoblast fusion. Taken together, these results support the idea that caveolin-3 expression is required for myoblast fusion and myotube formation, and suggest that p38 is an upstream regulator of caveolin-3 expression.